Samsung, SK Performance Bonus Breach-of-Trust Case May Move to Suwon... Who Will Investigate?

Seoul Serious Crime Investigation Agency considers transferring case to Suwon
Gyeonggi Nambu Police also investigating the same case
Police to continue investigating financial-sector hacking case
Jurisdiction Coordination Council set to launch ne

The breach-of-trust complaints over performance bonus payments at Samsung Electronics and SK hynix may be transferred from the Seoul Regional Serious Crimes Investigation Agency to the Suwon Regional Serious Crimes Investigation Agency due to jurisdictional issues. It is also unclear whether the Serious Crimes Investigation Agency will investigate the case itself, as police are already investigating the same allegations. Since the new investigative agency was launched, confusion over jurisdiction has continued.

According to legal circles on October 27, the Seoul Serious Crimes Investigation Agency's Economic Crimes Investigation Bureau is reportedly considering transferring the complaints to the Suwon Serious Crimes Investigation Agency. The move is believed to take into account the locations of the two companies' headquarters and the workplaces of those named in the complaints. Samsung Electronics is headquartered in Yeongtong-gu, Suwon, Gyeonggi Province, while SK hynix is headquartered in Bubal-eup, Icheon, Gyeonggi Province.

Employees arrive for work at the Central Major Crimes Investigation Agency in Jung-gu, Seoul. Yonhap News Agency

The complaints allege that executives of the two companies and union leaders committed breach of trust by agreeing to pay large performance bonuses without approval at shareholders' meetings. In July, the shareholder group Korea Shareholder Movement Headquarters filed a complaint with the National Office of Investigation (NOI) at the Korean National Police Agency against Samsung Electronics co-CEOs Jun Young-hyun and Roh Tae-moon, SK hynix CEO Kwak Noh-jung, and others, alleging breach of trust under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. The NOI assigned the case to the Gyeonggi Nambu Provincial Police Agency, and investigators questioned the complainant in August. The group later concluded that the police investigation was not making progress and, on October 2, the first day the Serious Crimes Investigation Agency began operating, resubmitted a complaint with the same allegations to the Seoul Serious Crimes Investigation Agency.

However, even if the Seoul Serious Crimes Investigation Agency transfers the case to its Suwon counterpart, a coordination process with the Gyeonggi Nambu Provincial Police Agency, which is already investigating the same case, will remain. The Suwon Serious Crimes Investigation Agency could take over and investigate, but it may also leave the case with police, taking into account the progress of the existing investigation.

In an earlier case involving an artificial intelligence (AI) cyberattack on a financial institution, the progress of the police investigation influenced whether the Serious Crimes Investigation Agency would open its own investigation. On October 6, the NOI determined that the case constituted a serious crime and notified the Seoul Serious Crimes Investigation Agency on October 21. However, on October 23, the agency decided not to open an investigation, citing the fact that police had already made substantial progress and were pursuing international cooperation with foreign agencies. Police therefore continued to handle the investigation.

The procedures for handling cases between police and the Serious Crimes Investigation Agency are set out in the Serious Crimes Investigation Agency Act. When police become aware of a serious crime, they must immediately notify the agency and transfer the case if it requests them to do so. The agency must respond within seven days of receiving notification, stating whether it will open an investigation. However, concerns about jurisdictional confusion had arisen even before the agency's launch, as the investigative authority of the two bodies overlaps and the criteria for determining a crime's seriousness are unclear.

The statutory consultative body that is meant to resolve jurisdictional disagreements has also yet to begin operating. An amendment to the Criminal Procedure Act that provides for the establishment of the Investigation Jurisdiction Coordination Council will take effect on February 5, 2027. Until then, the investigative body responsible for each individual case must be decided through coordination. A lawyer in Seocho-dong said, "What matters is not which agency handles a case, but whether the investigation continues without interruption. If a case is transferred without considering the progress of the existing police investigation and the evidence already secured, the continuity of the investigation could suffer."

This content was produced with the assistance of AI translation services.